The Chinese city of Yiwu manufactures and sells most of the items found in bazaars across all five continents – The city explains why the country weathered the crisis better than others.
· 11,000 traders from over a hundred countries.
One of the most enlightening experiences for anyone wanting to understand why China is called the factory of the world, why its trade disputes with wealthy nations make headlines daily, why it has navigated the global crisis far better than them and its economy is growing again at nearly 12%, and especially why the government refuses to revalue the yuan as requested by the United States, is to visit Yiwu, a city in the coastal province of Zhejiang, about 300 kilometers south of Shanghai.
For that, nothing beats flying directly to its brand-new airport. In Yiwu’s modern terminal, accents from all over the world intersect – particularly from the Middle East, Central Asia, and Africa – as businesspeople and traders arrive to stock up on everything imaginable in the largest wholesale market on the planet.
Its 60,000 shops offer 1.7 million products to 200,000 daily visitors
There are four million square meters dedicated to commercial use
Yiwu sold €5 billion worth of goods in 2009, 8% more than in 2008
Its inhabitants’ per capita income is 2.5 times the national average
Signs and advertisements in Arabic, English, Russian, Spanish, Hindi, Korean, and other languages indicate that people come to Yiwu to buy. To buy everything and in large quantities. The city lives for this. Because if the southern province of Guangdong, with its industrial parks stretching to the horizon, is the factory of the world, Yiwu is the global kingdom of the dollar store.
But there’s more. It’s not just trinkets and cheap goods sold by the ton that you find in every corner store worldwide. There’s much more: from massage chairs to LED screens, appliances, shoes, toys, suitcases, gloves, buttons, tape, pans, light bulbs, footballs, vases, artificial flowers, furniture, zippers, watches, bathtubs, and speakers. And more. So it’s better to say Yiwu is simply the world’s hypermarket.
The local government’s intentions were clear when it chose the city’s slogan: “A sea of products, a paradise for buyers.” A phrase repeated everywhere, reflecting the spirit of its residents, some of whom, under 30 years old, already drive powerful BMWs and Mercedes – symbols of success and luxury in this country, a haven for high-end brands.
“In Yiwu, everything revolves around business. Even during rare moments of free time, phones never stop ringing. But people accept it because they make a lot of money,” says Yue, a 25-year-old working at an Iranian import and export company.
Ju Xiaoli, owner of the brooch, buckle, and accessories store Little Stars, is a typical example. At 43, she has been trading for 18 years and business is thriving. Energetic and determined, she handles call after call while negotiating with two Pakistanis over an order of small plastic diamonds. “I manage sales at the shop, and my husband runs the factory we own,” she says, surrounded by calculators and phones. “We’re doing great,” assures the woman, who only takes time off during Chinese New Year celebrations. “She has several cars; one is a BMW,” one of her young employees chimes in, admiringly.
Across the table, Muhammad Moazzam Attari and Muhammad Imran Attari, dressed in white robes and green turbans, examine samples and exchange opinions while sipping instant milk Nescafé offered by Ju. Just 15 minutes later, the 25,000-yuan order is signed.
“In Yiwu, you find everything and at good prices. Even if the quality is average in some cases, it’s enough for my clients,” explains Muhammad Moazzam Attari, 37, from Lahore (Pakistan). “I’ve come for two weeks. I also bought shoes and various accessories. Part is for my store and part for supply to others. In total, I will buy 200,000 yuan worth.”
The trader says “the only hard part is the language.” That’s why his partner, Muhammad Imran Attari, 28, who has lived in China for eight years, took the lead in the Mandarin conversation, occasionally mixed with Ju’s basic English.
Activity is nonstop. Businessmen and women from around the globe flit from store to store like bees seeking pollen. Others negotiate with owners, calculator in hand. Street vendors offer watermelon slices and cucumbers to hurried visitors. In one corner, a Muslim man prays facing Mecca.
Next to a store, Gulala, 45, an Iraqi living in London, explains with her translator why she travels regularly to Yiwu. “We have an export company here. We buy everything – clothes, jewelry, sunglasses, electrical goods, furniture – and ship it to Iraq. The situation there is very bad. Everything is needed, and here there’s a lot of variety and it’s cheap.”
The city’s various wholesale markets cover over four million square meters, house more than 60,000 shops, offer 1.7 million different products, and welcome over 200,000 visitors daily. Sales in 2009 reached 41.2 billion yuan (€4.49 billion), a 7.8% increase over 2008, despite the crisis.
The largest is the International Trade Center – its first phase opened in 2002 and the fourth in 2008 (the fifth is under construction) – but one of the oldest is Binwang Market. Its 9,000 booths mainly sell clothing, wool, and textiles. In one of them, Wu Youbin, 40, sells bedsheets, curtains, and cushions made in his Dongyang workshop. “I have 60 workers in the factory. My two brothers also own workshops. I sell their products too. 80% of my business is for export, mostly to the Middle East,” he says, sitting next to a computer screen and a bill counter. “I prefer trading with foreigners because the orders are bigger. But if someone wants a single bedsheet, I’ll sell it too.”
Wu says that Yiwu, a city surrounded by green hills, has transformed completely in the last decade. Like many, he used to sell on the street. Now, the streets are filled with a constant flow of container trucks, delivery vans, and overloaded tricycles, especially around industrial zones like Beiyuan, filled with factories producing socks, jewelry, textiles, clothing, or rubber bands. These employ many of the 1.2 million migrants from other provinces, making up the majority of this city of two million. Workers earn between 1,500 and 2,000 yuan (€163–€218) per month, plus dormitory lodging and meals. Some get one day off a week; others only two or three per month.
Wang Xiaomin, 28, from the northeastern province of Heilongjiang, arrived in Yiwu five years ago looking for work. “Many of my classmates came here, so I did too,” she says on her way to a small restaurant for lunch. “My husband runs a business in Yiwu, and I work in production planning at [sock manufacturer] Bonas. I earn 2,000 yuan.”
Although most of Yiwu’s goods come from other provinces like Guangzhou or Jiangsu, the city has many factories, including the five largest sock and hosiery manufacturers in the world and the largest zipper producer, which supplies chains like the American Walmart.
Yiwu’s commercial boom – a city founded in 222 BC during the Qin Dynasty – began in 1982, shortly after China launched its reform and opening-up policy, with the creation of a large outdoor market. Today, it boasts massive malls, trade fair venues, and even an Olympic stadium used for international expos. Last year, its urban residents had a per capita income of 30,841 yuan (€3,360), and rural residents 12,899 yuan (€1,405); 1.8 and 2.5 times higher than the national average, respectively.
Yiwu merchants claim the global crisis was over for them months ago. “Last year was better, and now I have more business than before the crisis,” says Wu, surrounded by bundles of sheets. Ju says the same, though she complains about rising labor costs. “We’re having to send some manufacturing even farther away, to provinces like Jiangxi and Anhui,” she notes. Both have two children, a sign of financial comfort in a country where having more than one child results in heavy fines.
But doing business in Yiwu isn’t always easy. “Sometimes sellers change the agreed price,” says Muhammad Imran Attari. “Other times, when the container arrives, you find the shipment doesn’t match the order or the quality is poor. They apologize and say they’ll do better next time,” explains Boss, a 58-year-old Nigerian businessman who spent a month in Yiwu stocking up on gift items and textiles. “But generally, the quality is good and the price is right. What more could you ask?” adds Boss, who spent $100,000 on this trip and says his net profit margin is 15%.
Then he pauses and, like many traders, brings up the specter of yuan revaluation. The U.S. claims the yuan is artificially undervalued by up to 40%, benefiting Chinese export companies: “I’ll only keep coming to Yiwu if the yuan stays at the same level against the dollar.” Beijing has made it clear that any appreciation will be gradual and on China’s terms. It doesn’t want entrepreneurs like Boss to stop shopping at the world’s hypermarket.
When the West discusses relations between Beijing and developing nations, the focus is usually on Chinese-funded infrastructure megaprojects or contracts securing vital minerals and energy. But the economic ties go much further, with massive trade flows between both sides. China has responded to the needs of lower-income countries, whose people often can’t afford goods made in Europe or the U.S.
That’s largely the success of Yiwu, where many of the foreign traders end up settling. Over 11,000 foreign residents from about a hundred countries now live there. Among them are Iraqis and Afghans who’ve set up export companies, supported by city government incentives, and founded schools that teach Arabic. The mosque, built in 2004, welcomes over 6,000 worshippers every Friday, and the food scene is diverse.
Many Muslim traders dine along Chouzhou Street, where restaurants with names like Baghdad, Maedah, Al Arabi, Yousufu, or The Pyramid stand side by side. Their menus offer tasty lamb dishes, rice with raisins, and skewers. Outside, some men smoke hookah.
“My customers come from all over: Ethiopia, Yemen, Somalia, Morocco, India, Kuwait, Libya, Syria, Egypt, France,” says Khaled Ali, 24, owner of the Yemeni restaurant Saba, opened in 2003. “Many Muslims come to Yiwu, so my father thought it’d be a good idea to open a restaurant for them,” he says in the bustling eatery, almost entirely filled with male diners.
“The government wants foreign entrepreneurs to settle here and open companies. They make life easy and grant visas without trouble,” says this young Yemeni, born in Saudi Arabia, who has lived in China for eight years. His family also owns another restaurant in Guangzhou. On TV, news from an Arab channel echoes through the room.
Source: “EL PAÍS Yiwu 26 APR 2010”
